The distal airways possess a variety of features, which make them an attractive site for systemic delivery of therapeutics. These include a very thin epithelium, large surface area, avoidance of hepatic first pass metabolism and extensive vascularization. Pulmonary delivery is therefore being increasingly considered as an alternative for drug candidates, which are either unstable or poorly absorbed in the gastrointestinal tract (e.g. protein or peptides). It is estimated that hundreds of bioengineered proteins and peptides are currently either already on the market or are undergoing clinical investigation. Furthermore, even small molecule drugs can benefit from the nearly instantaneous delivery potentially achievable through the alveolar epithelium. Thus, a robust, commercially available in vitro model of alveolar transport and toxicity could significantly contribute to the development of new therapeutic products. However, such a model does not currently exist. The goal of the present grant proposal is to fulfill this unmet need by developing and producing a commercial in vitro model of the human alveolar epithelium. This model will be a useful screening/research tool prior to more expensive, time-consuming in vivo animal studies, reducing the number and scope of animals studies conducted. In addition to transport and toxicology applications during preclinical drug development, the model will find utility for applications related to environmental toxicology (e.g. asbestos, diesel exhaust, cigarette smoke, ozone, etc.) or basic research applications related to human lung diseases such as asthma. Normal human small airway epithelial cells (SAEC) will be cultured on microporous membrane inserts to produce an in vivo-like model of the human alveolar epithelium. During Phase I, the model will be characterized in terms of appropriate cell structure and function by methods including light microscopy, transmission electron microscopy, transepithelial electrical resistance, calveolin-1 (AT1 marker), P-glycoprotein (AT 1 marker), surfactant protein-C (AT2 marker) and peptide transporter PEPT2 (AT2 marker) expression, lectin binding (AT1 and AT2 specific), permeability to model hydrophilic drugs of various molecular weights, peptides and P-glycoprotein substrates. Longer-term lot-to-lot reproducibility and multi-laboratory validation of the model according to ICCVAM guidelines will be conducted in Phase II studies.